Trelleborg AB Business Report FY ended Dec. 2019
Financial Overview |
(in million SEK) |
| FY ended Dec. 31, 2019 | FY ended Dec. 31, 2018 | Rate of change (%) |
Factors | |
| Overall | ||||
| Net Sales | 36,588 | 34,005 | 7.6 | 1) |
| EBIT | 962 | 4,518 | (78.7) | 2) |
| Major automotive related segments | ||||
| Trelleborg Sealing Solutions - Sales | 12,141 | 11,049 | 9.9 | 3) |
| Trelleborg Sealing Solutions - EBIT | 2,729 | 2,559 | 6.6 | - |
Factors
1) Net Sales
-The Company’s net sales in the fiscal year ended December 31, 2019 increased by 7.6% over the previous year to SEK 36,588 million. The organic sales trend for the year was positive for the Trelleborg Industrial Solutions business area, while sales for Trelleborg Sealing Solutions were on a par with the preceding year. Organic sales growth for Trelleborg Wheel Systems was negative. The organic sales trend for the Businesses Under Development reporting segment was positive.
2) EBIT
-In the fiscal year ended December 31, 2019, the Company’s EBIT was SEK 962 million, a decrease of 78.7% over the previous year. In FY 2019, the consolidated EBIT includes restructuring costs of SEK 498 million and impairment of capital employed connected to the Businesses Under Development reporting segment of SEK 3,198 million. Excluding items affecting comparability, amounted to SEK 4,658 million (4,694), down 1 percent. The Trelleborg Industrial Solutions and Trelleborg Sealing Solutions business areas performed positively while weaker demand for tires in the agricultural sector and tires for material handling vehicles and construction vehicles had a negative impact on Trelleborg Wheel Systems. Earnings for the Businesses Under Development reporting segment were on the par with the preceding year.
3) Sealing Solutions Sales
-Sales in the Company’s Sealing Solutions business area increased by 9.9% in the fiscal year ended December 31, 2019 to SEK 12,141 million. Sales to Europe and Asia were negative for the year, but this was fully offset by healthy deliveries to North America. The strongest organic sales growth was noted in deliveries to the aerospace industry, while sales to general industry and the automotive industry declined. The area of healthcare & medical grew during the year and accounted for approximately 10 percent of the business area’s sales. Structural growth contributed 5 percent to the sales increase and changed exchange rates from the translation of subsidiaries had a positive impact of about 5 percent on sales.
Restructuring
-The Company informed that it is implementing organizational changes with the aim of focusing the Group on selected segments and at the same time highlight areas where improvement in profitability must occur. In the new organization, it will consist of three business areas, compared with five today. In addition, a reporting segment is being created, Businesses under development. The three business areas are Trelleborg Industrial Solutions, Trelleborg Sealing Solutions and Trelleborg Wheel Systems. Trelleborg Coated Systems and Trelleborg Offshore & Construction will be discontinued as business areas. A number of operations will be transferred to a new reporting segment, called Businesses under development, which will be recognized separately from the business area structure. Trelleborg Sealing Solutions will be unaffected by the organizational changes. Trelleborg Wheel Systems is only marginally affected by the transfer of its bicycle tire operations to Businesses under development. (From a press release on December 4, 2019)
Acquisition
-The Company informed that it has, through its Trelleborg Sealing Solutions business area, signed an agreement to acquire US-based Tritec Seal. Tritec Seal offers engineered polytetrafluoroethylene (PTFE) sealing solutions. The acquisition strengthens Trelleborg’s product portfolio, primarily in rotary seals, while giving the business area access to increased manufacturing capacity that is needed. Tritec Seal has its headquarters in Fenton, Michigan, U.S. Sales totaled approximately SEK 300 million in 2018. The transaction is expected to be finalized during the fourth quarter of 2019. (From a press release on November 25, 2019)
R&D Expenditure |
(in million SEK) |
| FY ended Dec. 31, 2019 | FY ended Dec. 31, 2018 | FY ended Dec. 31, 2017 | |
| Overall | 617 | 565 | 516 |
-Trelleborg Sealing Solutions announced that it launched Turcon MC1 and Turcon MC2 materials, the only polytetrafluoroethylene (PTFE) based electrically conductive materials suited for use in spring and elastomer-energized seals. Engineered for dynamic applications, seals and bearings from the materials will provide reliable electric connection between moving parts. Virgin PTFE is an excellent insulator. For PTFE composites to be able to conduct electricity, conductive fillers must be added, and these need to interconnect within the PTFE matrix. To prove the electrical conductivity, the compounds underwent significant testing in the Trelleborg’s in-house labs. Developed in Helsingor, Denmark, these compounds will support electrification of drives, eMobility, sensing and IoT solutions. (From a press release on October 9, 2019)
Capital Expenditure |
(in million SEK) |
| FY ended Dec. 31, 2019 | FY ended Dec. 31, 2018 | FY ended Dec. 31, 2017 | |
| Overall | 1,797 | 1,943 | 1,437 |
| -Sealing Solutions | 575 | 510 | 387 |
-Trelleborg Sealing Solutions informed that it has inaugurated a new production line at its facility in Kalmar, Sweden last week. It will increase brake shim capacity at the facility significantly. The line includes triple stations of adhesive lamination and a vision system with marking robots to ensure flexibility in manufacturing and enhanced quality control, providing an even better service to its customers. (From a press release on December 2, 2019)